Dáil Éireann Debate, Thursday - 4 December 2025
360. Deputy Carol Nolan asked the Minister for Social Protection to address concerns that the auto-enrolment process will undermine private company pensions by forcing private pension employees to pay 2% and the employer 1.5% which is more than the State auto enrolment contribution; and if he will make a statement on the matter. [68950/25]
Amharc ar fhreagraThe introduction of a pensions auto-enrolment system is a Programme for Government commitment, and one of my key priorities. The aim of introducing an Automatic Enrolment (AE) system is to address the pension coverage gap that exists in Ireland, and to help provide for better retirement incomes for workers. The new system will be called 'My Future Fund' and it will launch from the 1st January 2026.
My Department has evidence that some employers intend enrolling their employees into occupational pension schemes at rates lower than those provided for in the Automatic Enrolment Retirement Savings Act (2024) in order to ensure that the employees concerned are not automatically enrolled into the My Future Fund scheme. In the normal course of events, if such employees were being offered the same pension terms and benefits of other members already in the employer scheme, this might be a welcome development. However, I understand that in some cases the employees concerned are being compelled to join the scheme, including in circumstances where membership is not explicitly required under their contract of employment. I also understand that payments into these pension scheme consist solely of an employer contribution of about 1% of salary. Such a low contribution level is less than 30% of the initial contributions payable under the My Future Fund scheme and less than 10% of those that will ultimately be payable under that scheme. Such contributions are essentially a nominal contribution that is unlikely to yield any material pension benefit.
In order to address these concerns, I intend to exercise my powers under Section 52 of the AE Act to prescribe standards in relation to the levels of contributions by employers and employees to current occupational pensions, which will exempt an employment from My Future Fund. These standards are being considered by the National Automatic Enrolment Retirement Savings Authority in consultation with the Pensions Authority. These regulations will be finalised shortly, at which point the standards in relation to contribution rates will be made publicly available.
I hope this clarifies matters for the Deputy.
